iPad Mini expected to cut into full-size iPad sales

The iPad Mini will cut into full-size Apple iPad sales, according to predictions by two investment analysts.

The smaller iPad, widely expected to have a 7.8-inch screen, will draw 15%-20% of consumers who otherwise would have bought the larger size, the analysts estimate. But that still means most buyers will represent an "incremental opportunity" for Apple to increase its tablet market share through a smaller form factor.

The predictions are by Bill Choi, of Janney Capital Markets, and Piper Jaffray analyst Gene Munster. Choi says he expects the itsyPad to cannibalize 15% of iPad sales; Munster puts the figure at 20%. Their comments, in recent investor notes, were reported by Patrick Seitz, at Investor's Business Daily, among others

Choi thinks the small iPad, variously called iPad mini or iPad Air, will be especially attractive to women and children. He considers the "cannibalization risk" to both the iPad and iPod touch to be "modest." He predicts total iPad sales of 25.5 million for the final 2012 quarter. Of those, he expects that 6 million will be itsyPads; of those, 1 million will be to users who otherwise would have bought the full-size tablet, so the smaller tablet will reap 5 million net new iOS device users for Apple.

Choi recently boosted his iPad sales forecast for Apple in fiscal 2013, which began Sept. 30, to 102 million units, from 82.2 million, nearly a 25% increase. For the full fiscal year, he predicts Apple will sell 32 million iPad Minis and 70 million full-size iPads, with the average selling price dropping to $480 from $521. Choi thinks the smaller tablet will have a price range of $299 to $399.

Piper Jaffray's Munster is predicting a lower price range: $249 to $299. He thinks the small tablet could account for 5% for Apple's sales in fiscal 2013, though it's not clear from the IBD story if "sales" means revenue or units. "We believe lower priced iPads will result in more adoption in education, emerging markets, and retail," according to Munster, as reported by IBD.

Like Choi, Munster estimates Apple will sell 5 million of the smaller iPads in the current quarter, and will reduce full-size iPad sales by 20%. But Munster predicts that iPad Mini sales will be 25% of Apple's tablet sales for fiscal 2013, far less than Choi's estimate.

Apple this week issued invites for an Oct. 23 event in San Jose teasing: "We've got a little more to show you."

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

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